Economic Impact of Public Transportation Investment

1 Economic Impact of Public Transportation Investment2020 Update II | APTAE conomic Impact of Public Transportation Investment 2020 Update APRIL 2020 Report Prepared for: American Public Transportation Association (APTA)Report Prepared by: Economic Development Research Group, an EBP Company Economic Impact OF Public Transportation Investment 2020 UPDATE | 1 CONTENTSE xecutive Summary ..31 Introduction .. Context and Background .. Why Measure Economic Impacts .. Report Organization.

2 92 How Public Transportation Affects the Economy .. Transportation Performance Impacts on the Economy .. Spending Impacts ..143 Transportation Performance Impacts on the Economy .. Scenarios for Transportation Investment and Ridership .. Public Transportation Use and Mode Choice .. Time, Cost and Reliability for Transit Users .. Time, Cost and Reliability for Other Road Users .. Accessibility Impacts .. Overall Economic Impact of Cost and Productivity Changes ..234 Spending Impact .

3 Definitions: Direct, Supplier Purchases, Employee Spending .. Mix of Capital and Operations Investment .. Economic Impact Modeling .. Overall Economic Impact of Spending .. Impacts by Industry ..345 Summary of Findings ..362 | APTAAPTA leads Public Transportation in a new mobility era, advocating to connect and build thriving communities. Economic Impact OF Public Transportation Investment 2020 UPDATE | 3 ObjectivePublic Transportation is critical to the Americans who use it and even those who do not.

4 It is a lifeline for many as it provides mobility options, generates jobs, spurs Economic growth and supports Public policies regarding energy use, air quality and carbon emissions. All of these are important elements when it comes to considering the benefits, costs and optimal Investment levels of Public Transportation . This report focuses solely on one aspect how Investment in Public Transportation affects the economy in terms of employment, wages and business income. It specifically addresses how various aspects of the economy are affected by decisions made regarding Investment in Public Transportation .

5 This report updates an earlier report, Economic Impact of Public Transportation Investment , prepared by Economic Development Research Group for the American Public Transportation Association in 2014. Key findings are organized in terms of four categories: (1) overall findings, including the major changes from the previous report; (2) longer-term effects of Investment in Public Transportation , which enables a variety of Economic efficiency and productivity impacts to unfold as a consequence of changes in travel times, costs and access.

6 (3) the effects of spending money on Public Transportation , which creates immediate jobs and income by supporting manufacturing, construction and Public Transportation operation activities; and (4) conclusions regarding the interpretation and policy consideration of Economic impacts associated with Public Transportation FindingsIncreased Investment in Public Transportation can lead to significant Economic growth as a result of both the short-term stimulus Impact of Public Transportation outlays and a longer-term, cumulative Impact on Economic productivity.

7 The latter is enabled by increasing Investment to improve our nation s urban Transportation systems and sustaining the Investment over time. While the total Impact will depend on the level and distribution of Investment , the magnitude of potential Impact can be illustrated by considering a scenario of enhanced Investment sustained over 20 such a scenario of sustained higher Investment (which would lead to improved quality and availability of Public Transportation ), there would be a significant increase in ridership1, supporting additional growth of the national economy.

8 The Impact by the end of the 20-year period would represent a ratio of approximately $5 billion of additional GDP per $1 billion invested annually. This includes $3 billion due to the productivity effect of cost savings in the economy and $ billion supported by the pattern of Public Transportation Investment spending. At current wage rates, this is equivalent to a ratio of approximately 49,700 jobs per $1 billion invested in Public Summary1 DOT FHWA. 2015 Status of the Nation s Highways, Bridges, and Transit: Conditions and Performance.

9 Report to Congress (2016).4 | APTAThis report presents a methodology for calculating these impacts by examining the effects of three scenarios for long-term Public Transportation Investment in the United States:1. a No Growth Funding Scenario that maintains current spending levels and flat ridership;2. an Increased Funding Scenario that represents a modest increase in funding ($ billion per year) and corresponding increase in ridership; and3. a Higher Increased Funding Scenario with more Investment (an additional $7 billion per year) and higher ridership, which corresponds to levels of Investment that APTA has recommended to Congress.

10 Impacts of this scenario are summarized below. (See Table 1)*Difference in Impact between the Base Case scenario and Higher Increased Funding scenario, expressed as a ratio of $1 billion of added annual Investment in Public Transportation . In the five years since the previous 2014 report, evolving mobility trends are magnifying the long-term cost savings effect of Public Transportation . In that report, the ratio for the long-term cost savings effect was $2 billion for every $1 billion invested, compared to $ billion estimated in this report.